26 comments:

I believe most Europeans hope that Greeks are not that easily deceived by the ruling (?) government, and are very well aware that Greece not only has lived beyond her means, but needs interest rate and/or debt cuts and immediate short-term survival funds to avert a socioeconomic disaster willfully brought in by their current leaders.

Europeans are willing to still support Greece - but are very critical about retirement benefits and government spending and the lack of a tax base that are way larger than in other struggling European nations that, nevertheless, have managed to come out of the recession with appropriate austerity programs very, very well (but have paid into Greek funds and will never see that money again, even though their people are poorer and live more poorly than the Greeks).

Not my business but I think you're wrong. This is not really about the EU, it's about the ongoing consequences of what happened to the banks in 2008 and the banks are going to bleed you dry unless you break away.

Although this is a little off the topic, I think that Dienekes makes some good points regarding the Greek debt crisis and the Eurozone. The US faces similar problems due to the unwillingness of parties to compromise while the government continues to amass debts to to deficits.

Not my business but I think you're wrong. This is not really about the EU, it's about the ongoing consequences of what happened to the banks in 2008 and the banks are going to bleed you dry unless you break away.

In the case of Greece, the culprit was not the banks, but our government that was chronically in deficit, thus amassing a mountain of debt.

That debt could be financed until -as a result of 2008- investors became suspicious of highly-rated investments such as Eurozone bonds, and the pile of Greek debt was no longer sustainable.

Moreover, the socialist government that came to power in 2009, foolishly tried to keep its unrealistic campaign promises by distributing 2bn Euros in 2009 and continuing to proclaim that it would increase wages and pensions, instead of retrenching. The markets -rightly- understood that Greek finances were no longer sustainable, which set off the Greek crisis.

Unfortunately, the narrative that has succeeded in Greek society was that the misery of the last five years is due to our creditors, when in fact it is a necessary -and painful- adjustment, which was made even more painful by the policy mix which emphasized tax increases and wage/pension cuts, instead of firing off civil servants, privatization, and cutting bureaucracy. Moreover, just as the Greek economy finally hit rock bottom and had a small primary surplus and growth in 2014, the Greek electorate decided to throw it all out the window by electing the rag-tag coalition of communists, Maoists, and assorted loonies into power, which messed up the recovery and brought us to our current condition.

Both deserve blame. The people never vote to borrow money, which they then pay back at usurious rates of ten to one or much more. And it should not be legal for the government to make decisions like that without a direct vote.

The banks did not make any effort to restructure the debt either, or to ensure that Greece could repay it before loaning.

The bankers and politicians are tightly intermarried to the point you can't sort them out. They create these problems out of thin air and make incredible profits from doing so.

Dienekes, I have always had great respect for your opinons; as I read this last comment ("the narrative that has succeeded") it has grown a lot.Truth should always be told.

Sociocultural Anthropology at the School of Hard Knocks seems to have taught me to understand better the unsustainability of cultures/civilizations that do not adapt and evolve in a proper manner.

How can Greece survive in the XXIst century with a medieval, paternalistic mentality? Where is modernity, or Industrial or Technical revolution, in there to sustain such a big government dependent work force and pensions?

It is hard to believe anything the Greek government says. The Finance Minister said he would resign if Greece voted "Yes". Greece voted "No". He resigned. Why?

He blamed the European governments for wanting him gone. But why would the Prime Minister, after asking for a No vote and winning it, and thereby gaining strength for his negotiations, immediately give in to the Europeans on a point of national sovereignty and dismiss his Finance Minister. It does not make sense.

We will all be Greece. In the US all the politicians are bought by the corporate interests and they are hurrying to catch up with the European Union government from a clique in Brussels and government by corporations by means of the Trans Pacific trade pact which will usurp the laws and judicial system and replace with secret star chamber arbitration panels which have already been used to effect corporate greed over Ecuador and the Dominican Republic.

The bankers sell their bad debt to the ECB or the Federal Reserve, and the government sells their assets to monopolists who then charge how ever much they want. The government spends too much money on pensions, medical care, and military and the debt and promises increase with no bound until either our politicians or our form of government will change. The banks are never prosecuted for their thefts and fraud as they sell big debts to governments whether it is Greece or Jefferson County Alabama. The state owned pension funds are just another treasure chest to be looted by the bankers and private equity funds.

It is not just government versus the people which is a big enough problem already, it is the looter banks and lenders who profit at every point stealing from government and the people. There is profit in death, and the bankers know it.

Dienekes: you mean the parties which are responsible for starting the whole problems and lived on cost of 80 % of your population during the last 20 years could negotiate a better deal than Syriza?!! Sorry, to say: But right now nobody can save your country anymore. Brussels and we Germans (well, our government..) will not allow your country to recover. And what about your wealthy people? Do they start solidarity payments for their country now it is bankrupt? No? You see, these are the real problems, not some Maoists which are in govenrment for a mere six months. Greece will fail ultimately, but so will more and more European countries in the coming years. I honestly feel sorry for your country and your people, who will have to face a very bleak future - no matters what happens in the coming days.

"While Merkel has thumped her fellow leaders into painful reforms, she has dodged needed changes at home. In 2012 she pressed her neighbors into a new fiscal compact that tightened oversight of national budgets. Yet rather than taking advantage of German financial strength to increase spending, Merkel balanced the national budget in 2014 for the first time in 45 years. Germany runs a tremendous current account surplus—7.5 percent of GDP in 2014, compared with 2 percent for China—which means it should be buying more from the rest of Europe, stimulating exports and growth there. Many economists and policymakers have called on Germany to reduce its surplus by reforming its economic model. “Policies to promote more domestic investment and demand would be good for the German economy and for the global economy,” U.S. Secretary of the Treasury Jacob Lew said in a 2014 visit to Berlin."

"Achieving that, however, would entail altering Germany’s own economy by, for instance, getting coddled service industries to increase productivity and wages. A 2014 study of the German economy by the Organisation for Economic Co-operation and Development argued that such steps would also help Germany by boosting potential growth as its labor force ages. The country’s leaders, however, see its surplus as a measure of its economic superiority and react angrily to any criticism. “It would be absurd to discuss whether German competitiveness should be reduced,” Jens Weidmann, president of the German central bank, said in April."

Germany loved the "EU" while Greece was buying Mercedes cars and Bosch appliances. They also loved having Greeks pay for German and Swiss engineers and contracting companies to design and build infrastructure projects like the Athens and Thessaloniki metros, the Athens airport, and the Via Egnatia.

Low and beyond, the Greeks incurred a deficit, partly due to too generous public sector salaries and retirement benefits, but mostly due to a lack of reasonably paying private sector jobs, as well as the burden of having to pay for exorbitant infrastructure spending which mostly benefited non-Greeks.

The IMF and EU (the Belgian Waffles) and Merkel know this. They just won't admit the part they played in the creation of this disaster because who would want to give up a cushy job pulling $300,000 a year?

Dienekes: you mean the parties which are responsible for starting the whole problems and lived on cost of 80 % of your population during the last 20 years could negotiate a better deal than Syriza?!!

Syriza wasn't born yesterday. The parties that governed Greece were on the wrong path, but Syriza always supported wrong policies to the extreme. They opposed every privatization (even of enterprises that were leaking money like Olympic Airways), wanted to increase the minimum wage to more than 1000 euros, and basically advocated every irresponsible policy known to man. These morons accused Greek governments that were running deficits, and bloating the public sector of being "neoliberals" who oppressed the people.

Just six months ago, Syriza came into power by opposing ~1 billion of worth of cuts proposed by ND-PASOK to finish the 2nd program. If Greece went the distance, it'd be out of a bailout now and could access ECB's quantitative easing. Instead, thanks to the "negotiations", Greece has to enter a 3rd bailout, do 12 billions worth of cuts, and be subject to troika supervision for the next 3 years.

True, but the excessive lending that started all this has been well under way for twenty years, well before 2004.

I remember being in Thessaloniki in about 2002, and started wondering where all the cash was coming from to build the Via Egnatia, the Thessaloniki metro, massive archaeological excavations in Northern Greece, paving of every village road that had been hardly more than footpaths forever, newly installed telecommunications infrastructure, etc.

The roots of all this debt did not begin with Syriza.

I do not think that if Greece "had gone the distance" and taken the ND-PASOK cuts, they would be "out of the bailout". There is no real industry in Greece. And the reason there is no real industry is because Germany, the Netherlands, Denmark, Switzerland, etc. don't want to put any industry there. They want to keep these jobs for themselves.

Germany and some of these other EU countries weren't serious about a real economic union. They only wanted Greece and the other Balkan countries to buy there manufactured goods. But as to a real union, with real business investment in Greece and the Balkans, it was a big NEIN.

So there have only been government jobs and government handouts (and money from the US that mostly comes from Greek-Americans, Greek-Canadians and Greek-Australians).

As with most things in life, the truth is somewhere in the middle. Yes, we (Greeks) voted for useless politicians during the last decades and showed unjustifiable apathy with regards to the obvious mismanagement that took place. On the other hand the "solution"imposed by the EZ since the crisis began was counterproductive and shocked the country into an unprecedented recession, creating a vicious circle of economic stagnation and loss of government revenues. Besides, you cannot expect the average granny to have a degree in macroeconomics and most of us were too busy making a living without knowing about the deficit level, etc. Oh, and with most employees on PAYE, we did pay taxes too...http://www.bbc.com/news/magazine-33479946.In my opinion, the saddest thing is that regardless who is to blame, the EU ideal of a united Europe with peace and friendship among its nation, is now dead and buried, thanks to a badly designed common currency experiment.

"In the case of Greece, the culprit was not the banks, but our government that was chronically in deficit, thus amassing a mountain of debt."

Thats the problem of all countries in the world.

I recall that, like 5 or more years ago, I have seen a TV show in German TV in wich was shown that Germany is so high in dept, that it will never be able to pay back the money ever. Making depts frequently started in the 1970s. And the German re-union drove the depts so high that Germany is now a slave to the banks and will pay interest for the depts til all eternity.

I can easily understand, how a country wich is overburdened with its own depts cant give another country money to pay its depts. Or if at all, with clenched teeth.

There are a number of misconceptions and silly generalizations in this thread.

First of all, much of the Greek population did not benefit from the budget-swindling of the Greek governments over the past 10+ years. The high-earning minority certainly did, and some of that trickled down to the middle class. The low-earning retirees and unemployed mostly benefited by low retiring ages and relatively cushy social and medical services - but the latter not really comparable to European standards.

Secondly, Greeks generally, currently are not suffering that badly if you compare to times before the Euro. The Greek economy (including commerce and standard of living) basically inflated and grew tremendously after the introduction of the Euro - to the benefit of almost all. Conversely, one cannot measure the current downfall of the economy by comparing to post-Euro peak levels, but one should to do this relative to pre-Euro levels. In the latter case, Greece as a whole, is still much better off today.

Finally, there is this notion that Germans or Angela Merkel do not really want an equal European Union, equal well-being, or don't want to help. All of that is, clearly speaking, misguided or even thinly-veiled racism.

Europeans including Germans have already taking a huge cut in Greek loans by lowering the interest rates to levels a factor of 5-10 below market value. Germany will also push for extending the terms by decades, and likely reducing the rates to ridiculously low levels (compared to both market values and in real terms). Germany will also likely vote to give additional financial support.

Finally, you need to understand politics. Germany also speaks for all those European countries who themselves were at trouble during the financial crisis, but were able to get out of it with flying colours both because of and despite of austerity measures (Portugal, Spain, Ireland, Iceland, Baltic states, Slovakia, Slovenia). People in these countries are extremely angry that they had to suffer much, yet made it, while Greece is a black hole and they have to pay into her funds forever.

German politics currently is to placate those sentiments while simultaneously come to a pragmatic solution that spares these countries from further sacrifices, while at the same time providing Greek support from the richer countries - most importantly, Germany.

From my experience (My country went through a similar situation in 2009-2010 but at a minor scale) populism is the culprit and in this regard the people are first to blame, then politicians (who sell what people want to buy) and others in the last (banks, troika, UFO's, God, whatever)

People have the choose and what they choose ?If a politician tell them: "Inbalances is accumulating so we have to take some hard measures now because later will be much much harder" what are his chances to win the election ? from null to zero

People are not interested in finance, macroeconomics, structural imbalances and so, they will vote the politicians who offer the milk and honey way. "It's the politicians job to deliver happiness. How they will do it ? Not our problem. If they can't then we choose others who can"

@eurologist"Greeks generally, currently are not suffering that badly if you compare to times before the Euro."

Marnie:This is not true. Many Greeks, especially the professional middle class, are much more poorly off than they were twenty years ago.

Eurologist:"The Greek economy (including commerce and standard of living) basically inflated and grew tremendously after the introduction of the Euro - to the benefit of almost all. "

Marnie:This inflation was *not* beneficial to the overall stability of the Greek economy. Greece really didn't need Starbucks and Ikea. All this did was displace small scale local businesses. Furthermore, Greeks were not able to sell their manufactured and agricultural goods into the EU, which has further destroyed small businesses in Greece.

eurologist:"Conversely, one cannot measure the current downfall of the economy by comparing to post-Euro peak levels, but one should to do this relative to pre-Euro levels. In the latter case, Greece as a whole, is still much better off today."

Marnie:Unemployment, even of highly educated people, has never been higher than today in Greece. It is now 16%. Prior to joining the EU, for at least a decade, unemployment was below 12%.

eurologist:"Finally, there is this notion that Germans or Angela Merkel do not really want an equal European Union, equal well-being, or don't want to help. All of that is, clearly speaking, misguided or even thinly-veiled racism."

Marnie:It is really irrelevant as to what Angela wants. The fact is that she and her cohorts have pushed an austerity only solution for Greece, ignoring other factors that contributed to the imbalance of payments.

eurologist:"Europeans including Germans have already taking a huge cut in Greek loans by lowering the interest rates to levels a factor of 5-10 below market value. Germany will also push for extending the terms by decades, and likely reducing the rates to ridiculously low levels (compared to both market values and in real terms). "

Marnie:Everyone is aware that the German taxpayer has paid handsomely to finance debt in Greece (and other debtor nations in Europe). However, the German government, and European financiers (the Belgian Waffles) have done nothing to correct for the fundamentals of why there are so few private sector jobs in Greece. True, Greeks themselves have also not taken steps to address this. So there is no point telling Greeks what a bunch of schlubs they are, when 'Dieter' the taxpayer, with his nicely protected job, knows nothing about unemployment in Greece. Greeks are very tired of hearing about how lazy, greedy and corrupt they are.

eurologist:"Finally, you need to understand politics. Germany also speaks for all those European countries who themselves were at trouble during the financial crisis, but were able to get out of it with flying colours both because of and despite of austerity measures (Portugal, Spain, Ireland, Iceland, Baltic states, Slovakia, Slovenia)."

Marnie:Europe is not out of the financial crisis. Even France is in a terrible mess. Spain is heading off a cliff. However, this is not the fault only of Greece. The fact that Greece has been made a convenient scapegoat, now for years, while not addressing market fundamentals in Europe, only makes the entire EU look either incompetent or purposely dishonest.

eurologist:"People in these countries are extremely angry that they had to suffer much, yet made it, while Greece is a black hole and they have to pay into her funds forever."

Marnie:People in Europe may be extremely angry, but their economic situation is not the fault of Greece. It is the result of poor fiscal policy and overpromising on the part of their leaders and EU officials.

eurologist:"German politics currently is to placate those sentiments while simultaneously come to a pragmatic solution that spares these countries from further sacrifices, while at the same time providing Greek support from the richer countries - most importantly, Germany."

Marnie:Sounds very patriarchal to me. You talk of Greece like it is a wayward, lazy, hapless child and of Germany like it is sacrificing, hardworking, and faultless.

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